Glossary of real estate terms - San Francisco and beyond - Part 2
Below is part 2 - glossary of real estate terms(Part 1 may be seen here.)
Closing Statement (also know as the Settlement Statement or HUD):
A document that provides an item-by-item breakdown of all costs as well as the source of funds associated with every real estate transaction. Also called a HUD-1, the name of the standard form created by the Department of Housing and Urban Development, it is required for the completion of every real estate transaction.
Contingency Clauses:
These are terms in a contract that give a party to the contract a legal excuse for not performing (i.e. a buyer does not have to buy the property if the buyer does not approve of an inspection of the property or the buyer is not able to obtain a loan.) Contingency clauses typically have a set number of days by which the contingency must be removed from the contract or the decision made not to proceed with the sale.
Conventional Mortgage:
A home loan that is not insured or guaranteed by an agency of the federal government.
Covenants, Conditions and Restrictions (CC&Rs):
This document establishes the rights and responsibilities of owners typically within a subdivision, often enforced by an association of owners organized to maintain common areas owned by all owners within the subdivision.
Days on Market:
The number of days that a property is listed as available for sale before being sold or removed from the marketplace.
Earnest Money:
Money a buyer provides as a deposit when an offer is made to purchase a property.
Easement:
Access given to a third party to use a portion of one's property for a specific purpose, such as for utilities or a driveway.
Encroachment:
Any structure, such as a fence, that extends into a property owned by someone else.
Encumbrance:
A claim or a lien that appears on the title that, unless resolved, can interfere with the transfer of property.
Escrow Agent or Closing Agent:
A person who is impartially responsible to both the buyer and seller (or borrower and lender) to make certain that all of the terms and conditions of the real estate transaction (or loan) are completed. Also known as a Settlement Agent.
Fee Simple:
A type of ownership of property, it entitles the owner to use their property as they see fit, in accordance with state and local laws.
Insurance Binder:
Proof of coverage required by a lender to show that a sufficient hazard insurance policy exists on a property. This document must be provided to a lender by an insurance agent before the lender will agree to loan money for the purchase of the property.
Liquidated Damages:
The buyer and the seller determine in advance a set amount of money to be paid should one of the parties fail to meet the terms of their Purchase and Sales Agreement.
Mediation:
When a mortgage payment does not cover all of the interest that is due, the unpaid amount is added to the principal balance, causing the loan balance to increase instead of decrease.
Negative Amortization:
When a mortgage payment does not cover all of the interest that is due, the unpaid amount is added to the principal balance, causing the loan balance to increase instead of decrease.
Non-Conforming Loan (known as a Jumbo Loan):
Any loan that is too large to be purchased by the secondary marketing firms, Fannie Mae or Freddie Mac. (In most markets the single family dwelling limit is $359,650, with higher amounts for higher cost areas.)
PITI:
Principal, Interest, Taxes and Insurance. The total monthly payment for a property with an amortizing loan that includes the principal, interest, taxes and insurance.
*reprinted courtesy of California Real Estate magazine, September 2005 issue
Part 1 may be seen here.
posted by SFResidence.com @ 8:06 AM
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